“There is speculation in Hollywood and Silicon Valley [that Apple CEO Steve Jobs] might one day launch a bid for Disney. The idea is not as outlandish as it might seem. Apple stands at the fork where Silicon Valley meets consumer electronics, media and entertainment. The company has a reputation for trailblazing innovation, but the key to its success has more to do with marketing and industrial design than technical innovation,” Keith Woolcock writes for The Telegraph. “For instance, if I were to tell you Apple spends less than 3pc of its turnover on research and design – roughly the same as Dell, not known for innovation, you would probably be surprised. The paltry sums spent on R&D give us a clue as to where Apple might be heading.”
“The miracle of digital electronics is the pace of innovation quickens and prices collapse. Jobs knows this and will understand that while Apple might be riding high its long-term future needs something more. He is facing the same dilemma that consumer electronics companies like Philips and Sony faced decades ago. You might start off making high returns from sexy gadgets and music systems, but eventually competition will drive prices down. As Apple’s low R&D spend highlights, there is very little rocket science behind what the company does,” Woolcock writes. “The classic way for consumer electronics companies to handle the wafer thin returns that hardware earns is to either sell consumables, such as tapes, ink cartridges and film, or go into content. Sony, for instance, owns a huge film and music catalogue. Philips used to own Polydor, the music company. Just as digital electronics has revolutionised consumer electronics, it is now reshaping the content industry.”
“Music, films and television programmes are being stored on memory disks and silicon chips. Apple has taken a giant step towards content by launching its iStore music service, which only last week announced that it had downloaded a billionth song from its library. Music continues to be at the centre of Apple’s drive into our living rooms. On Tuesday the company launched a Hi Fi system that looks as though it were crafted by a higher order intelligence and delivered to earth on a sleek space ship,” Woolcock writes. “Last year’s launch of the video iPod suggests Apple might see its future in the movies. Jobs’s seat on Disney’s main board puts him in a great position to plan such a move. Whether he buys Disney or not, I bet film and video soon get main billing at Apple. What was that line from Toy Story: To infinity and beyond. It might just be.”
Full article here.
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Stupid, stupid, dumb idea.
That would kill Apple.
Might, could, perhaps someday…..
I love these writers who just sit around and speculate, never having any solid info or ldeas, just pulling stories out of their asses.
that would be the worst idea for apple as a computer company and probably worse still for a ‘media / media distribution’ company, dumb dumb dumb, but we all know this is speculation and would never happen even if it could which it probably couldnt and im gonna shut up now bye
a Hi Fi system that looks as though it were crafted by a higher order intelligence and delivered to earth on a sleek space ship – what has this guy been smoking ?
He would own — just to name a few — Disney, ESPN and ABC. Holy Crapolie!
As long as he keeps Apple a separate company and continues to push great products to market, I have no problem. American capitalism at its best. Please say you will also buy the SF 49ers and bring them back to glory, Steve!!!
“iStore”?!
At least get the easily-checked facts straight, chump!
Not going to happend. The very idea would kill distribution deals with the remaining major content holders out there. Apple needs to be independent when it enters negociations with other labels
Not a very enlightening article. For one thing, Steve would not be buying anything, it would be Apple, which Jobs does not own. As wealthy as he is the idea of him personally purchasing a conglomerate the size of Disney is ridiculous.
“……Please say you will also buy the SF 49ers and bring them back to glory, Steve!!!…….”
To that, I would add …
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and maybe …. hire Eddie D to run the show !!
is the new Disney Buys Apple.
That didn’t happen. This won’t either.
And Apple DOES spend more on R&D than Dell, as many articles have noted.
Does Dell make an OS?!? Does Dell make dozens of huge software apps?!? Does Dell innovate with hardware designs like Apple?!?
The Motley Fool has an interesting commentary on this topic. They think a buyout is unlikely.
Although, if it did happen, Apple would get good press on ABC.
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Is it just me? Or… How does Dell spend the same percentage of there income on R&D as Apple spends? What does Dell spend all it’s R&D dollars ON?
apple spends almost 3x the money on R&D – with a lot less revenues… and the crack about technical innovation? apparently this clod (like many people) doesn’t concider the software technology of the iApps and Mac OS X to be on par with Intel’s chip making.. which is silly.
Everybody knows that SJ is BG’s puppet. You do know that, don’t you?
I might also someday launch a bid for Disney. Insha’allah as they say where I’m living now. I will never stop using Macs but I just can’t believe that such speculation is written in such a regular basis. It’s time to tell prognosticators to stop such artlicles. It does nothing but make the Mac community look really silly.
That is just what is need — by Apple’s competitors. Sure, buy Disney and then make all content owners except Disney competitors. What are these idiots smoking?
total freaking idiot. first off calling it the iStore leaves out 10 characters of the store’s real name, Apple spends slightly more than Dell on R&D on much smaller revenues so I just can’t believe that they both spent 3%, and the problem with the Apple buying Disney rumors is that Apple is not much bigger than Disney. If the stock goes up to 100 maybe, but right now disney is worth about 54 billion and Apple is worth 59 billion. If Steve already owns 7%, for Apple + Steve to get a controlling interest, assuming they trust each other to vote together, Apple would have to buy another 44% or $23.8 billion of Disney, without Steve they would need 51% or 27.5 billion. They have at least 6 billion in cash so that would mean 17-21 billion in stock? I don’t understand how this whole thing works.
Like some bloke in the UK has his pulse on American corporate economics.
Uh huh, sure. He’ll have better luck finding Diana’s real killer.
“last week announced that it had downloaded a billionth song from its library”
A billionth? Huh? Isn’t that really small? A billionth of a millimeter.
MickeyMac
Oh brother.
I’ll tell you about Steve Jobs, heck I almost grew up with the guy.
He really doesn’t care about Mac’s, he knows he has lost the desktop to Microsoft, he’s full of vigor and want’s to succeed at what he does, regardless of what he does.
He’s a big wheeler dealer man now, sort of a Donald Trump or a Ted Turner. Buying and selling companies like selling used cars.
Apple was a tool for him, he’s using it to get what he really want’s to be, a media mongul.
Eventually he expects the Macintosh line to diminish once Microsoft retaliates with Vista, so he’s overcharging for everything. OS upgrades, iLife upgrades, Leather iPod covers (almost $75 more than third party companies charge), sick looking Boombox wannabe Bose knockoff.
He’s milking us fellow Mac fans, and I have seen this behavior before in buisneses and companies that know the end is near, they don’t give a dam about their reputation, they just want as much money as they can get before they go under.
Yes, more rumors! Could we at least rank these rumors by category?
A = I heard this report from the guy who smokes crack.
B = I heard this report from the second cousin of the guy who smokes crack.
C = I heard this report from the dog of the second cousin of the guy who smokes crack.
You get the picture.
Why Disney? Somehow I doubt the CEO who kicked the icon-signs off Apple’s lawn would have much patience for running amusement parks.
There are better companies for Apple to pursue, for less money.
No MacDude,
you didn’t ‘almost’ grow up with Steve Jobs.
You’re a very silly insignificant little person.
Stop ranting.
You’re too immature for this site.
“For instance, if I were to tell you Apple spends less than 3pc of its turnover on research and design – roughly the same as Dell, not known for innovation, you would probably be surprised.”
Yes, I would be because it would be a flat-out lie. Apple spent 3.1% of its revenues on R&D in the past quarter (182m/5749m). Dell spent 0.8% of its revenues on R&D in the past quarter (125m/15183m).
Can’t journalists do a little work? Can’t editors hold journalists just a little bit accountable for the drivel they write?
Please email The Telegraph and tell them the Keith Woolcock is just pulling figures out of his butt. However, the Telegraph site doesn’t give any info on how to reach the editor via email.
The holes in this story are so big that you could drive a truck through them. First, as another poster above correctly noted, the amount of R&D spend by Apple is significantly higher than Dell. It has to be, as Apple creates its own operating system, software and hardware. (While manufacturing of much of the company’s hardware takes place abroad, and the supply of components, and design some circuitry, such as the case of the next generation Intel-based towers is outsourced, the vast majority of hardware development is from scratch by Apple.)
Second, the present and future holdings of Disney stock is owned by Steve Jobs, NOT Apple. This is a critical and fundamental point. Apple had no direct affiliation with Pixar, nor does it have a direct affiliation with Disney. The two companies may be trading partners, but unless Apple as a corporate entity invests directly in Disney shares or corporate debt (bonds) as part of the company’s investment portfolio, the shares held directly by Steve Jobs are his, not Apple’s.
Third, for Apple to attempt to acquire Disney, the company would assume a mountain of debt. For a debt-free company, that would be idiotic. Add to that the diversification (or de-worsification) of such ownership, however theoretical, would be a poor direction for Apple, which has no experience in entertainment. Diversification of this nature typically results in disasterous results. This is doubtful to the point of being ridiculous.
Fourth, the iTunes Music Store is a crown jewel of Apple, an asset that has been critical to the company’s recent growth and stock price surge. To acquire Disney would be, in effect, competing against the very record, television and movie content suppliers that are critical to the success of iTMS. If you are a competing record label, television network or movie studio, how would you react?
What Steve Jobs does as an individual investor is entirely different than what Apple does as a corporation. Yes, a link between Apple and Disney is Steve Jobs, but everything about this is mutually exclusive.
Shall I keep going?
I’m amazed that the editor at the Telegraph did not throw the draft of the story back in the reporter’s face.
Garbage. Pure garbage. It must have been a slow news day.
In short: move along, folks. There’s nothing to see here.